Wade pfau, a leader in retirement research, reported on research in the hidden value of a reverse mortgage standby line of credit, an article that appeared on. A lot of advisors did their due diligence about reverse. Reverse mortgages have been surrounded by negativity. Hi, im wade pfau, professor of retirement income at the. Academic research and other uses for reverse mortgages retirement researcher on march 31, 2016 at 11. Read more about wade pfaus latest research on reverse mortgages in the april 2016 issue of the journal. The following is a summary of these issues, as they affect the content of this book as of october.
He is a past selectee for the investmentnews power 20 for people expected to shape the financial advisory industry, and is a recipient of financial planning magazines influencer. The shocking truth about retirement income wade pfau. The new case for reverse mortgages the experts wsj. Using reverse mortgages in a responsible retirement income plan. I enjoyed reading wade pfaus retirement column understanding the line of credit growth for a. The requirements to become an eligible reverse mortgage hecm home equity conversion mortgage borrower include age at least 62, equity in your home any existing mortgage can be paid off with loan proceeds, financial resources to cover tax, insurance, and maintenance expenses, no other federal debt, competency, and the receipt of a counseling certificate. Wade pfau, author at mclean asset management page 2 of 52.
Mar 10, 2016 clients also receive the national council on aging hud approved reverse mortgage consumer booklet titled use your. Recent research has investigated how opening a standby line of credit through a reverse mortgage and strategically spending from this line of credit can help improve the sustainability. Reverse mortgage concerns financial planning association. Sep 24, 2017 the event was designed to educate financial planners about the product, but pfau used the time to explore some of the postoctober 2 possibilities, laying out a list of potential hecm strategies ordered by the speed at which the funds are used. A survey of approximately 230 financial planners during a mutual of omaha mortgage and international retirement resource center webinar hosted by dr. The event was designed to educate financial planners about the product, but pfau used the time to explore some of the postoctober 2 possibilities, laying out a list of potential. Reverse mortgage loan terms include occupying the home as your primary residence, maintaining the home, paying property taxes and homeowners insurance. Borrowing against your home october 2010 update since the publication of this booklet in 2008, there have been a number of important changes in the reverse mortgage world. How to use a reverse mortgage to protect your retirement.
The hidden value of a reverse mortgage standby line of. Were the largest reverse mortgage lender in america. In 2014, intrigued by the seemingly universal bad rap reverse mortgages had cultivated, dr. The hidden value of a reverse mortgage standby line of credit. How to use reverse mortgages to secure your retirement advisor. They were often mentioned alongside phrases like last resort, out of money, and bad choice. Reverse mortgage researcher pfau weighs in on new hud. One key new contribution shows that retired homeowners with a mortgage may be significantly better off refinancing their traditional mortgage with a reverse mortgage, rather than just paying if off over time, or paying it off early from other resources. When examining the totality of negative press that reverse mortgage products have to endure, many of the most persistent reputational hurdles faced by the products arise from. Yes, because they get you a higher initial line of credit.
But the research and the public policy changes over the past few years indicate that reverse mortgages can be a valuable tool in a retirement income plan in a way that many advisors may not realize. A professor of retirement income at the american college, wade pfau works to educate financial planners on retirement income strategy. An exclusive group of industry and thought leaders brought together by the wall street journal who engage in indepth. Wade pfau attempted to find this safe savings rate in his study, safe savings rates. In general, the older you are, the more equity you have in your home, and the less you owe on it, the more money you can get. Long live the reverse mortgage, i wrote about retirement researchers renewed interest in an improved reverse mortgage product, the home equity conversion mortgage, or hecm. Journal incorporating home equity into a retirement income. How to use reverse mortgages to secure your retirement explains how, when used correctly, reverse mortgages can provide an added layer of security for retirees and allow them to enjoy retirement more by gaining liquidity from an illiquid asset. A reverse mortgage is viewed as an option, but its only a last resort once the investment portfolio has been depleted and vital spending needs are threatened. Department of housing and urban development 451 7th street s. A researcher and financial analyst explains the role of the reverse mortgage in retirement planning.
Borrowing against your home reverse mortgage loans. One can go to amazon and do a search for reverse mortgage books and find plenty of material on the subject matter, but what makes pfau s book stand out is that it is. The problem with the 4% rule is that its, well, always changing. A new approach to retirement planning over the lifecycle, which was published in the. A lot of advisors did their due diligence about reverse mortgages in the past. Feb 21, 2017 first, coordinating retirement spending from a reverse mortgage reduces strain on the investment portfolio, which helps manage the risk of having to sell assets at a loss after market downturns. Reverse mortgages, 2nd edition is wade pfaus recent update of the original title. How to use reverse mortgages to secure your retirement retirement researcher media, 2016 by wade pfau, ph. Sep 19, 2016 a new book on reverse mortgages hit the shelves this past weekend, offering readers a comprehensive guide on the valuable role home equity plays in retirement income planning. Pfau, understanding the economics behind the reverse mortgage and also having a background in education, explains the product in depth in an easytoread format. How to use reverse mortgages to secure your retirement by wade. Using reverse mortgages in a responsible retirement income plan though reverse mortgages have long held a bad reputation, research and public policy in recent years are shedding new light on their potential uses in retirement. The content on this website is not approved by or associated with the department of housing and urban development, federal housing administration or any government agency. For instance, the hecm for purchase sat on top along with using a reverse mortgage to pay off an existing forward mortgage or to fund aginginplace.
Wade pfau late last week revealed that 77% of financial planner respondents are more receptive to offering reverse mortgages to their clients in light of the stock market volatility introduced by the ongoing. The official reverse mortgage handbook approved by hud, this guide helps older adults weigh their decisions about tapping their home equity. Wade pfau points out in incorporating home equity into a. Wade pfau reverse mortgage book one reverse mortgage. About mclean asset management corporation headquartered in tysons, virginia and with offices in bedford, new hampshire, mclean asset management corporation was founded in 1984 and offers retirement planning, including wealth management and investment advice, to individuals and employer retirement plans. Mar 15, 2016 now that we understand how reverse mortgages work, we can go into greater depth on the potential ways an hecm reverse mortgage can be used within a retirement income plan.
Wade pfau s book provides a clear, concise and insightful study of reverse mortgages in retirement planning. Visit our page to request our free reverse mortgage book that mails right to your. Wade pfau, wrote a book on reverse mortgages called reverse mortgages. The following is excerpted from wade pfaus new book, reverse mortgages. Retirement expert wade pfau on how much money you really need. So i spoke with wade pfau, one of the top minds in retirement research.
In this first session of the financial mentor podcast, wade pfau from, reveals deep knowledge based on published research about retirement income and return on. Pfau debunks reverse mortgage critics misconceptions. How to use reverse mortgages to secure your retirement. Wade pfau has a unique and very advanced approach to doing these studies. In this debut finance book, pfau draws on accumulated research and a deep understanding of the intricacies of reverse mortgages to advocate for their role in a balanced fiscal strategy for retirement. Pfau is a professor of retirement income in the new phd program for financial and retirement planning at the american college in bryn mawr, pa. Rethinking reverse mortgages and building better portfolios with dr. Nov 11, 2015 in his study, pfau examined six ways to use a reverse mortgage as part of retirementincome plan and the upshot is that homeowners now have a framework for deciding which strategy might be best.
Several recent research articles published in the journal of financial planning have investigated how opening a standby line of credit through a reverse. Wade pfau and the safe savings rate the wall street. He ends the book explaining the value of reverse mortgages and how it is a good move to work with a financial professional when discussing these items. Reverse mortgages investments and wealth institute. Once, reverse mortgages were considered to be the financial stepchild of retirement income sources. Wade pfau of the american college while use of reverse mortgages isnt widespread, advisors should nonetheless brush up on the products, as they could become the. Reverse mortgages provide the ability to borrow a portion of your home equity without being required to repay the loan until the owner has permanently left it. Using reverse mortgages to secure retirement with dr. Recently, a professor and financial manager, wade pfau, wrote a book on reverse mortgages called reverse mortgages. How to use reverse mortgages to secure your retirement the retirement researchers guide series volume 1, available from the link above. In this article, i show that the benefits of opening a homeequity conversion mortgage hecm line of credit extend beyond meeting spending needs. Using reverse mortgages in a responsible retirement. In this debut finance book, pfau draws on accumulated research and a deep. Aug 23, 2016 ten strategies for using a reverse mortgage to help fund retirement in my last post, the mortgage is dead.
An in depth overview of the home equity conversion mortgage housing wealth foundations 20 minute segments for advisors wanting to see case studies and examples 12 questions brokerdealers ask about reverse mortgages discover the 12 most important questions broker dealers are asking about the new reverse mortgage. How to use reverse mortgages to secure your retirement by wade pfau 2016, paperback at the best. Wade pfau, phd, professor of retirement income at the american college, penned an article for forbes that provides a thorough history of reverse mortgages. Initiating a reverse mortgage earlier in retirement can help meet spending goals. Journal understanding the line of credit growth for a reverse. Using reverse mortgages in a responsible retirement income. First, coordinating retirement spending from a reverse mortgage reduces strain on the investment portfolio, which helps manage the risk of having to sell assets at a loss after. Articles by wade pfau freelance journalist muck rack. Ten strategies for using a reverse mortgage to help fund retirement in my last post, the mortgage is dead. The following piece is an excerpt from wade pfaus book, reverse mortgages. Wade pfau, research fellow for the alliance and professor of retirement income at the american college. An amazing amount of misinformation has circulated on reverse.
An in depth overview of the home equity conversion mortgage housing wealth foundations 20 minute segments for advisors wanting to see case studies and examples 12 questions broker. The second potential benefit of opening the reverse mortgage earlyespecially when interest rates. Incorporating home equity into a retirement income strategy. Leading retirement researcher pens new book on reverse. Ten strategies for using a reverse mortgage to help fund. Wade joined mclean in 20, the same year investment news named him one of the 20 people expected to shape the financial advisory industry. Recent research has investigated how opening a standby line of credit through a reverse mortgage and strategically spending from this line of credit can help improve the sustainability of retirement income strategies. When looking at combinations of cash from reverse mortgages and investment portfolios, a key is the growth rate and volatility of the reverse mortgage line of credit compared to the portfolio. But respected authorities like wade pfau have shed new light on its potential uses in a. Wade has created state of the art tools to understand how reverse mortgages impact retirement spending, including improvements from refinancing traditional with reverse mortgages. Financial planners more receptive to reverse mortgages. In 20 pfau joined mclean asset management as director of retirement research. Wades technique keeps these factors and others in line with each other. Pfau, phd, cfa professor of retirement income the american.
Find wade pfaus email address, contact information, linkedin, twitter, other social media and more. Sep 22, 2016 wade pfau has pulled all this together and significantly extended the research in this book. He also serves as a principal and director for mclean asset management, helping to build retirement income solutions for clients, and chief planning strategist of software provider instream solutions. Why open a reverse mortgage before it is actually needed. When looking at combinations of cash from reverse mortgages and investment portfolios, a. Wade pfau the latest news about wade pfau from the wsj the experts blog. Pfaus advice on how to retire in a low interest rate economy. Listen to wade pfaus april 6, 2016 webinar, leading retirement researcher makes new case for lowcost reverse mortgage. Though reverse mortgages have long held a bad reputation, research and public policy in recent years are shedding. Aug 14, 2017 with a reverse mortgage, a lender makes payments to the homeowner based on a percentage of the value in the home. How to use reverse mortgages to secure your retirement by. Readers will gain new insights and appreciation of value the previously often maligned reverse mortgage brings to homeowners in retirement.
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